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HomeMy WebLinkAboutA007 - Council Action Form dated October 14, 1997 ITEM # DATE 10/14/97 COUNCIL ACTION FORM SUBJECT: PUBLIC HEARING ON THE ESTABLISHMENT OF ECONOMIC DEVELOPMENT AREA AND URBAN RENEWAL PLAN FOR DISTRICT #4 . Action Form Summary: The City Council has previously referred to the Planning and Zoning Commission the Urban Renewal Plan for the Proposed Urban Renewal Area Number 4. Additionally, the City Council approved the Development Agreement between the City of Ames and the Dayton Road Development Corporation, which documents the responsibilities for the development of the proposed Urban Renewal Area. The City Council is now being asked to approve the designation of this area as an Economic Development Area and approve the Urban Renewal Plan for Area Number 4. The Planning and Zoning Commission and staff recommend approval of the Urban Renewal Plan and Urban Renewal Area. BACKGROUND: On June 24, 1997, the City Council was approached by a developer to establish a second Tax Increment Financing (TIF) District. The new TIF district is located directly south of the existing Tax Increment Financing District, which is located along Alexander, Graham, and Bell Avenues south of Lincoln Way, and East of Interstate 35. To accomplish this, the area needs to be included in an Urban Renewal Area and designated as an Economic Development Area. ANALYSIS The project consists of extending Bell Avenue south approximately 750 feet to Southeast 5th Street, plus the extension of Southeast 5th Street to the west approximately 375 feet. The City of Ames' costs will be associated with the construction of approximately 1,125 linear feet of the following: Sanitary Sewer Water Main Storm Sewer Street Lighting Electric Distribution Paving 1 The creation of a TIF District will enable the following to take place: • A mechanism to install infrastructure that the City of Ames can recover the cost of the installation through the recovering of the incremental taxes, which would normally go to the General Fund of the City of Ames, the Ames School District, Story County, and DMACC. • Provide lower cost land to local and new businesses looking at expanding their operations in Ames. • Require that a speculative building be made available at all times within the development. • Expand on the successful first TIF District and extend the Ames Community Industrial Park to include an additional 49 acres. The City of Ames will apply for RISE funding for the total length of the road in this project. The State of Iowa may fund up to one-half of the cost of the road construction. The RISE Application will be submitted on September 1, 1997. The financing on this TIF project is projected to have a 12-year pay back period. This is calculated assuming there is no RISE funding. The 12-year period reflects the development time frame of the original TIF District. CONSULTATION BRIEFING: As part of the process of establishing an Urban Renewal Area for Tax Increment Financing, it is now required that a "Consultation Briefing" occur with the School District, the County, and the Community College. This Consultation Briefing occurred on September 10, 1997. Three members of City staff were in attendance, as well as the President of the Ames School District. The briefing involved an explanation of the intended use of TIF financing, and an explanation of what consequences the creation of a TIF district might have on other taxing jurisdictions. As a result of this Consultation Briefing, there have been no additional comments received from the other taxing jurisdictions or other suggestions for changes to the proposed TIF district as described by staff. (A copy of the minutes of the Consultation Briefing is attached.) STAFF COMMENTS: Staff has reviewed the creation of Urban Renewal District Number 4 in relation to the adopted Land Use Policy Plan, and has determined that the creation of this district is in compliance with the LUPP as described as follows: 2 Goal 1. Recognizing that additional population and economic growth is likely, it is the goal of Ames to plan for and manage growth within the context of the communities' capacity and preferences. It is the further goal of the community to manage its growth so that it is more sustainable, predictable and assure quality of life. 1.A. Ames seeks to diversify the economy and create a more regional employment and market base. While continuing to support its existing economic activities, the community seeks to broaden the range of private and public investment. 1.13. Ames seeks to integrate its growth with an economic development strategy for the Central Iowa Region. The creation of Urban Renewal Area Number 4 serves to accomplish the purpose described in this goal of the plan by establishing an Urban Renewal Area with costs to the City that are recoverable within an acceptable time frame and are consistent with past TIF investment practices of the City. Additionally, the creation of this Urban Renewal District, which includes TIF financing, enables the installation of urban infrastructure that will make this area of Ames an attractive place for additional private investment, and further expand the attractiveness of Ames as a place for private industrial investment within the Central Iowa Region. Goal 9. It is the goal of Ames to promote expansion and diversification of the economy in creating a base that is more self-sufficient and that is more sustainable with regard to the environment. 9.A. Ames seeks more diversified regional employment opportunities involving technology-related services and production, office centers and retail centers. 9.13. Ames seeks to attract and support a small and medium-size business center that utilizes the skills and products of the areas trained workforce. 9.D. Ames seeks economic activities that are compatible and sustainable with its environment. The creation of Urban Renewal Area Number 4 will serve to accomplish these goals by enabling a continued opportunity of industrial development expansion. The previous Urban Renewal Area has been successful and has been largely completed leaving little developed industrial land in this area of the city. This effort represents a continued effort at expanding the industrial tax base of Ames. 3 The concentration of financial resources in this area of the city has created an attractive location for private investment to locate and concentrate in the Urban Renewal Areas that are created. Businesses and industries that have located in the existing Urban Renewal area have generally been small to medium-sized businesses, and industries that are well suited to the make-up of the community. This area of the City has been identified for a long time as a location for industrial development and has not created negative consequences to the overall environmental resources of the Ames area. The Urban Renewal area under consideration is not the only area requested to be reviewed for the establishment of a TIF District. Several property owners in the area requested inclusion into the Urban Renewal Plan so as to have the TIF District available to them for development purposes. City staff determined that the area currently under consideration made the best use of the City of Ames resources, and the extension of utilities would be best done in an orderly fashion and coincides with a master plan developed for this area. The owners of the Armstrong Trust property have indicated that an Urban Renewal designation for the property owned by the Armstrong Trust, as well as the Risse property, should occur now to better enable the city to address the development issues of these additional properties when this might occur in the future. The owners of the Armstrong Trust have asserted that urban renewal designation should be applied to these additional properties to assist with the removal of blighted conditions and better prepare the City and the land owners to anticipate future development. The removal of blighted conditions can be a very complex issue and requires that the City fully develop a strategy for this type of task. The work necessary to develop this type of strategy has not occurred, and it is staffs position that this constitutes a separate issue from the Economic Development effort associated with the designation of the proposed Urban Renewal Area Number 4. Staff believes that the inclusion of these additional properties should not occur at this time, and is more appropriate to be dealt with as a separate strategy of the City. Since it has already been determined that the development of the Dayton Road Development Corporation property is best suited to the overall goals of the city in this area, there is no need to include additional property in the Urban Renewal Area at this time. A copy of the Urban Renewal Plan #4 is provided for your review. PLANNING AND ZONING COMMISSION RECOMMENDATION: The Planning and Zoning Commission reviewed the Urban Renewal Plan for area 4 and considered testimony that was heard. Representatives from the Armstrong Trust advised the Commission to not designate the proposed area as an Urban Renewal area for the following reasons: 4 1. There is not evidence to support that the type of growth that is projected to occur will not occur with the subsidies available through Urban Renewal. 2. The amount of project subsidies for the proposed area might be too high. The Planning and Zoning Commission considered other testimony from the owner of the Risse property, and after a review of the information provided, the Planning and Zoning Commission has recommended that the City Council designate the proposed areas as Urban Renewal Area Number 4. ALTERNATIVES: 1. The City Council can approve the approve Urban Renewal Plan for Area #4 and designate the area as Urban Renewal Area Number 4. 2. The City Council can deny the approval the Urban Renewal Plan for Area #4 and not designate the area as an Urban Renewal Area. 3. The City Council can direct staff to reconsider this proposal and bring back a modified proposal. MANAGER'S RECOMMENDED ACTION: It is the recommended that Alternative #1 be adopted. This action will approve the Urban Renewal Plan for Area #4 and designate the area as Urban Renewal Area 4. This will enable the City and developers of the Dayton Road Development Corporation to proceed with the responsibilities that have been established in the development agreement for this area of the City. Attachment 5 URBAN RENEWAL PLAN FOR URBAN RENEWAL AREA NUMBER FOUR URBAN RENEWAL PLAN for URBAN RENEWAL AREA NO. 4 1. Urban Renewal Plan Objectives. The Urban Renewal Area (URA) consists of an undeveloped G-1 (General Industrial) zoned area at the easterly edge of the City. The zoning conforms with the General Plan of the City which indicates that this area should be developed as industrial land use. URA objectives include the following: Enhance the availability of sites to accommodate the construction of new industrial and commercial buildings; Encourage and support development that will expand the tax base; Provide infrastructure to enable land and lease rates to be available at a reduced cost to prospective industries; Make public improvements as deemed necessary by the City to support new industrial development; Provide expanded industrial building square footage for prospective industrial businesses of the City; Provide infrastructure to property that contains lots of various sizes to meet the demands of industrial prospects. Provide Tax Increment Financing where a duration limit of 12 years will be imposed for the repayment of the indebtedness incurred by the City for the public improvements. Encourage the use of land that meets the growth goals of the City of Ames and is consistent with an overall master plan. Assist industrial areas that represent a logical continuation of the Community Industrial Park that has been established by the City. 2. Conformance With Land Use Policy Plan (LUPP)/Zoning Ordinance. LUPP - The City of Ames Land Use Policy Plan (LUPP) designates the area encompassed by the Urban Renewal Plan Plan as appropriate for"Industrial" land uses. This Urban Renewal Plan conforms with the goals, policies, and the objectives of the City of Ames Land Use Policy Plan. Zoning - The City of Ames Zoning Map designates the area encompassed by the Urban Renewal Plan as appropriate for G-1 (General Industrial) and thus would permit land uses that are in compliance with the City of Ames General Industrial standards. 3. Property Description. General Location - The property is located approximately 900 feet east of Dayton Avenue, approximately 1,260 feet south of Lincoln Way on Bell Avenue and extending a distance of approximately 2,600 feet south of Lincoln Way, and is west of Interstate 35. This area includes approximately 50 acres. Legal Descriptions - The legal descriptions of the Urban Renewal Area are included in Attachment A. 4. Project Description. Constructing Bell Avenue approximately 750 feet south to Southeast 5th Street, then west approximately 375 feet. Also, water sewer mains, storm sewers, street lighting, electric lines. Specific public improvements - Sanitary Sewer = 1 ,125 Linear Feet Water Main = 1 ,1251-inear Feet Storm Sewer = 1 ,125 Linear Feet Paving = 31' Wide Street Electrical Distribution = 1 .125 Linear Feet Street Lighting = 8 Units Engineering Entrance Enhancements Specific Private Improvements - Construction of one speculative building of $400,000 value. 5. Procedure for Changes in the Approved Urban Renewal Plan. If the City of Ames desires to modify this Plan, it may do so in compliance with the following process. A. The plan modification prepared by City staff*; B. Notification of Consultation sent to other taxing entities; C. Notification is sent to all property owners within the "Project Area"; D. The Planning and Zoning Commission reviews the plan modification and makes a recommendation to the City Council; E. The date for public hearing by City Council is established and Public Notice published; F. The City Council holds a public hearing and takes action on the plan modification; G. If approved, the plan modification is adopted by resolution of the City Council. *A plan modification can be prepared by someone other than the City staff. Said plan modification must be prepared pursuant to the guidelines provided by the City and must adhere to the format established by those guidelines. ATTACHMENT A DESCRIPTION: LAND SOUTH OF EXISTING TIF AREA Survey Description: The southeast Quarter of the Northwest Fractional Quarter, except the Interstate Highway Right-of-way; and the East twenty-two acres of the Southwest Fractional Quarter of said Northwest Fractional Quarter; and the East forty feet of the Northwest Fractional Quarter of said Northwest Fractional Quarter, all in Section 7, Township 83 North, Range 23 West of the 5th P.M., Story County, Iowa, containing 54.36 acres, more or less, subject to legally established highways and easements of record. c rcno -0rn a T T czcDQ Eon S£# ST iTI a a� s =3 a� c <_0 •and uouf T U 6 # AMOTH S!1 N L � •.rtj m� .i�i � � z �2I a •a qsd •an UC4 and!pisIsm � N Q and OMS _ W 3 a p •any Bio1Q oS O Z = W Z w � M lz m D II COMMUNITY INDUSTRIAL PARK EXPANSION II IwI 35 ROW RESERVATION ICI - I�I ----------------------- •---- I II V) 4. 47 ACui ICI 6.05 AC I- II U � m D FUTURE LOT 70' ROW co D I � I m l 1 . 87 AC m L81 1 .85 AC 1 .86 AC c� 2.11 AC M I O 80 O FUTURE STREET 820 — 31 B—B — 8 PCC #:;B;ELL AVE 3 O O ti I 2.47 AC I 2.47 AC I 2. 49 AC 16. 75 AC CMAY BE FURTHER SUBDIVIDED IN THE FUTURE I V 0 200 SCALE LIMITS inITF T A T F ��i TIF Consultation Meeting Meeting Minutes 9/10/9 7 4:00 p.m. Room 235 Attendees: Bill Sommers - Ames Community School District - School Board Member, Steve Schainker - City Manager, John Klaus - City Attorney, Mark Reinig - Economic Development Coordinator. Mr. Sommers asked for a description of what the TIF District will do to the school districts tax base. Mr. Schainker explained the TIF boundaries, the debt needed to build the infrastructure and the City of Ames' plan to retire the debt. A handout describing the debt service and payback on the original TIF District was given to Mr. Sommers. A handout describing the projected debt service and the projected payback on the proposed TIF District was given to Mr. Sommers. A map was provided to Mr. Sommers of the proposed project area as well as a Council Action Form describing the Urban Renewal District and TIF Process. Mr. Sommers asked for and received a description of what happens next in the process. WWI- Mr. Schainker offerred to attend the School Board meeting to further explain the TIF process. Mr. Sommers was informed that the comment period for his organization would be open until October 7, 1997. The meeting was adjorned at 4:25 p.m. Minutes taken by Mark Reinig William A. Armstrong 3711 S.Duff Ave. Ames,IA 50014 515/232-9361 Brian O'Connell, Dir., Planning and Housing Mark Reinig, Economic Development CITY OF AMES, IOWA 515 Clark Ave. P.O. Box 811 Ames, IA 50014 Re: Max N. Armstrong Trust, Dayton Avenue, Ames, Iowa Expansion of Urban Renewal Area Number Four Dear Brian and Mark: I am the trustee of the Max N. Armstrong Family Trust, the legal owner of 15 acres adjacent to the area proposed to be designated Urban Renewal Area number Four under Code of Iowa Chapter 403. Please consider this letter a formal request that the city consider expanding the Urban Renewal Area to include the Armstrong Trust property, the auto salvage yard property of Mr. and Mrs. Risse, as well as two smaller lots located on Dayton. All the properties proposed for inclusion are the south Dayton "front door" to the Ford Street property to the immediate east. There are policy and practical reasons why expanding Urban Renewal Area Number Four meets the planning objectives of the city. Background: The city is moving forward with plans to expand the Ames Industrial Park on land owned by the Ford Street Development Company. The urban renewal designation is a statutory prelude to tax increment financing (TIF) of certain road and utility improvements for industrial development of the park expansion. Jon Chester, on behalf of the Armstrong Trust requested TIF for the Armstrong Trust property concurrent with Ford Street's request. The City staff chose not to include the Armstrong Trust property in its TIF recommendation. The staff is now proposing to limit the Urban Renewal Area Designation. to the TIF area. Armstrong Perspective: The Armstrong Trust is an interested party in this action. Although we will be hard pressed to compete directly with Ford Street parcels with its TIF utilities and roads, we remain keenly interested in marketing the Armstrong Trust property for industrial development. Although the Armstrong property development may be delayed, it is well positioned for a growing market once phase two of the industrial park is full. In the orderly industrial development of the east side of Ames, development of the Dayton frontage properties, including the Armstrong Trust parcel, is the logical next step after phase two. This step requires cleanup of the Risse property. In this respect, we feel that the interests of the Armstrong Trust and the public interests coincide. We have and will continue to work with the city and our RECEIVED ��P � � 1997 DEPT, OF PLANNING&to AMk Page Two: Max N. Armstrong Trust September 9, 1997 neighbors to prepare for this continued growth. Expanding the urban renewal area is in furtherance of those interests. Reasons for Proposed Expansion: The policy statement of Urban Renewal Chapter of the Iowa Code addresses removal of impediments to and organization of resources and processes for orderly development and redevelopment of Iowa municipalities. A main thrust of the chapter deals with removing blighted areas, another is encouraging the expansion of commercial enterprise. The current urban renewal designation focuses only on the latter policy objective. Expanding the renewal area as proposed above would address both objectives. The Risse property meets the statutory definition of a "blighted area" and is a significant impediment to development of the Dayton industrial corridor. Incorporating this parcel into the urban renewal area is an important first step (beyond the general land use plan) toward east side industrial development after the Ford Street property. The diversity of ownership and the variety of parcel sizes are additional impediments to future industrial development of the area. Incorporating all of these properties in the urban renewal area. will encourage the orderly industrial development of the area. In addition, addressing these issues now is good public policy. Of more immediate practical interest is the impact of expanding the urban renewal area on the success of phase two of the Ames Industrial Park. By clearly preparing for redevelopment of the Risse property, the marketability of adjacent properties can only be enhanced. It is in the public interest that phase two be subscribed as quickly as possible. Prospective buyers will certainly be encouraged to become actual buyers if the city can point to a plan for removal of the adjacent auto junk yard. This is a minimal cost action that the city can take to reduce its exposure in TIF phase two. From a procedural perspective satisfying the statutory provisions for conformity of expanded urban renewal plan with the general land use plan, for designation of a blighted area, and for public input will, at this point is cost effective way and would position the city to quickly exercise its redevelopment powers under chapter 403' should an opportunity present itself. Thank you for your consideration of this proposal. I would appreciate the opportunity to discuss this with you in more detail. Very trug. Ar jgf William